In this third year of CFO’s Tech Companies to Watch, we found a notable shift in the applications being offered by vendors. In every functional area of the companies that made our annual list — process management, recruiting, travel expenses, receivables management, and compliance among them — the goal is unearthing the real story behind the data to make more intelligent decisions.
The entirety of the list appears in the April/May 2019 edition of CFO magazine. We are revealing the first 10 companies on CFO.com, one per day. Our first nine tech companies to watch were FortressIQ, Behavox, Completed.com, Yaypay, Yapta, AuditBoard, Sisense, App Annie, and Aviso. Today, we cover Anaplan’s solution that helps improve financial planning.
Designs on Dominance
What organization wouldn’t want to improve at financial planning? Plans sometimes fail, but having them is a distinct advantage. A tool to help build and maintain a plan, of course, has to do a lot: budgetary relationships and financial dependencies need to be automatic, for example; the product needs to make real-time adjustments (because companies plan more frequently than 5 to 10 years ago); it has to connect decision-makers across the enterprise; and it has to be easy to use. Those are just table stakes.
Many vendors are competing to check those boxes and more. Notable among them is publicly held Anaplan, a 10-year-old player in the space that boasts 1,100 customers worldwide. Anaplan’s “connected planning” platform lets CFOs “continuously analyze business performance, make real-time adjustments to forecasts and plans amid fluctuating market conditions, and instantly communicate any impacts of those changes to the entire business,” says CFO Dave Morton, who came on in September 2018 and spent more than 20 years at Seagate Technologies.
Anaplan approaches planning in a different way than traditional finance-centric solutions. “Our platform sits on top of any other transactional systems (like ERP) and is not tied to bundled solutions,” says Morton. “This reduces friction and rapidly increases the agility of data analysis and decision-making.”
Anaplan’s cloud-based solution uses a proprietary, in-memory modeling engine called Hyperblock. The company says the technology allows thousands of concurrent users to access a centralized data pool and also facilitates planning models that reach down to the level of individual transactions.
How are businesses deploying Anaplan’s platform? Financial planning and analysis, demand and supply chain planning, and sales compensation and territory management are among the applications, according to the company. A life sciences client is using it to manage a drug trial, all the way down to the patient level. A media industry customer uses it to manage every product launch and product discount. “With a unified data source for all trade promotion efforts, the [company’s] process is more efficient and reliable,” says Morton. “They’ve replaced spreadsheets with real-time reporting and now have complete confidence in the data.”
Additionally, in concert with Deloitte, Anaplan has developed a tool for consumer packaged goods companies that handles demand planning tied to consumer promotions. Deloitte and other large consulting firms are important partners for Anaplan, which has about 1,000 trained consultants. They use the platform to deliver their solution set, which might be around zero-based budgeting, for example, or the reduction of working capital, says Morton.
“The power of the platform starts with the opportunity to reexamine and reimagine your process to make it better, so you can do more and solve for an even bigger challenge,” he adds. “We recommend that our customers work with an implementation partner to help them realize even greater value.”
As of fiscal year 2019, ended January 31, Anaplan had 248 accounts with annual recurring revenue of more than $250,000. The company’s total revenue increased 43% year over year, to $241 million. For fiscal 2020, Anaplan projects another 32% of revenue growth.
Equity investors have high expectations, too, as Anaplan boasted a $5 billion valuation in late March. “We’re on a strong financial trajectory to grow revenues, drive leverage in the business model, and increase our cash-flow generation.” Sound too optimistic? One of Anaplan’s financial services customers has been able to reduce its planning process from three months to one week. If other customers get similar results, Anaplan could become a juggernaut.